The UK government has increased air passenger duty (APD) and extended the criteria for higher APD rates for private jet owners in its Autumn Budget, which was published today (November 26).
All APD rates will increase in line with the retail price index (RPI) from April 1, 2027, with amounts rounded to the nearest penny.
Following a consultation on proposals that were first outlined in its 2024 Autumn Budget, the Labour government will extend the higher APD rate to all private jets over 5.7 tonnes.
Under the latest calculations, the extended private jet APD is expected to generate an additional £720 million in annual revenue.
This would be part of an overall package of tax reforms that include changes to capital gains tax, inheritance tax, ISA limits, and stamp duty, amongst others, which is set to raise £8.3bn in total.
“The government believes that the extension of the higher rate strikes an appropriate balance between ensuring those who choose to travel by private jet make a fair and proportionate contribution to public finances, while continuing to support the sector’s long-term competitiveness and growth,” the government said.
Previously, private jet levy was applied to travel in aircraft of 20 tonnes or more.
The higher rate APD for 2027-28 is £146.63 for domestic flights and ‘Band A’ flights – reaching up to 2,000 miles.
Travel of between 2,001 and 5,500 miles will be allocated in the Band B category and charged £1,132.76. Band C – over 5,500 miles – will be charged £1,178.20.
For commercial passengers, APD rates come in reduced rates or standard rates. Reduced rates are for travel in the “lowest class” available.
Reduced rates for domestic will be £8.26, Band A will be £15.49, Band B will be £105.33, and Band C will be £109.46.
Standard rate domestic charges will be £16.52, Band A will be £33.04, Band B will be £251.95, and Band C will be £261.25.
“APD raised £4.2bn in 2024-25 and its primary objective is to ensure that the aviation sector makes a fair contribution to the public finances,” the government said.
The passenger duty for commercial flights is paid by airlines and operators and is levied on a per passenger basis on all flights departing from UK airports with a maximum take-off weight of 5.7 tonnes or more.
The British Airline Pilots Association (BALPA) “condemned” the Budget as “bad news" for the aviation industry.
“Firstly, the Chancellor has ignored calls from BALPA — the voice of airline pilots and the industry — and announced plans to increase APD in line with RPI from April 2027," said Alice Sorby, director for strategy and reform at BALPA.
"This is bad news for passengers, especially families going on holiday, who now face increased ticket prices.”
BALPA also said the Budget makes “no provision to address the UK’s urgent need to train new pilots”.
“It’s even more bad news for young people considering a career as a pilot,” said Sorby. “Rachel Reeves has missed an opportunity to deliver any measures that will make their eye-watering training costs more affordable. This simply isn’t good enough.”
“The government recognises the importance of aviation in maintaining connectivity within the UK and with international markets,” the government said.
“The consultation aimed to understand how any changes to the taxation of private aviation can be implemented in a way that continues to support economic activity, investment, and regional accessibility, while maintaining a fair and proportionate approach to taxation.”
The APD reform document can be found here.
Yesterday, the UK Government announced that is has selected Heathrow Airport’s plan for a third runway, which is expected to be in operation by 2035.
Heathrow’s plan was selected over a rival plan submitted by Arora Group, led by hotel tycoon Surinder Arora.
Under the £33bn plan, a new 3.5km north-western runway will cross the M25 motorway.
“We're acting swiftly and decisively to get this project off the ground so we can realise its transformational potential for passengers, businesses, and our economy sooner,” said Transport Secretary Heidi Alexander.
“If the Government wants to drive economic growth through expanding Heathrow, it needs to ensure we have the right skills to fill the new jobs the airport will create,” said Sorby.
Today’s Budget was an unconventional one, marked by a blunder from the Office for Budget Responsibility (OBR), which accidentally posted its analysis of the Budget online before the chancellor’s Budget statement.
“A link to our economic and fiscal outlook document went live on our website too early this morning,” the OBR said in a statement. “It has been removed.”
The opposing Conservative party has called for an inquiry into the leak. The OBR said it has initiated an investigation into the matter.